Origin to study opportunities for new LNG projects

Origin Energy is studying new LNG projects to provide its next stage of growth as its A$24.7 billion ($22 billion) development in Australia with ConocoPhillips is due to begin exports next year.

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By JAMES PATON

Bloomberg

Origin Energy is studying new liquefied natural gas (LNG) projects to provide its next stage
of growth as its A$24.7 billion ($22 billion) development in
Australia with ConocoPhillips is due to begin exports next
year.

One of the key questions for the company is where do we
go with LNG? managing director Grant King said
Thursday. Weve been doing some preliminary work
about opportunities to take what weve learned in the
LNG business and look at how we might grow that in the years
ahead.

Origins Australia Pacific LNG venture in Queensland
state is one of seven export developments going ahead in the
country to tap rising Asian demand for the fuel. The company
is interested in geothermal and hydro power projects in nations such as Chile,
as well as potential LNG options, King said.

We are mindful that our capacity to invest and grow
beyond 2017, 2018 is significant, he said, adding that
its too early to comment on specific LNG opportunities.

Origin also expects to reduce debt and return money to its
shareholders through dividends after the Australian LNG
venture starts bringing in cash, King said.

The project in Queensland will deliver a step
change in the companys earnings and cash flow
from the 2016 financial year, the company said as it reported
a 5% increase in first-half underlying profit.

Arrow Energy, the gas producer owned by Royal Dutch Shell and
PetroChina, proposed building a fourth LNG export development
in Queensland to follow projects being built by Origin,
Santos and BG Group. Shell delayed its decision to go ahead
with the project due to cost inflation in
Australia.

Origin and Arrow would benefit from collaborating, Bank of
America Merrill Lynch said earlier this month.

Were happy to put to them the merits of working
together, King said. You can assume weve
done that. But its entirely in Arrows hands as to
how they take it forward.

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